Barack Obama bowed to the wave of US public anger over unemployment and other recession-related issues when he promised in his first state of the union speech last night to make the creation of a million jobs the overwhelming priority for the coming year.

Obama used his 71-minute speech to re-align himself more closely with the concerns raised by disenchanted voters in the stunning Massachusetts election loss last week.

Although he insisted he would fight on to salvage his troubled health reform bill – another issue cited by voters – he devoted only a small portion of his speech to it. Instead, the unrelenting message was jobs, jobs, jobs.

Obama, who was reported by a journalist who had lunch with him earlier in the day to be deflated by the turn of events that has seen his popularity drop, nevertheless appeared relaxed throughout the speech. It was delivered on prime-time television at a joint session of the Senate and the House of Representatives.

He largely avoided the soaring rhetoric for which he is famous and opted for a more workmanlike approach, setting out proposal after proposal aimed at helping the country out of recession. About two-thirds of the speech was devoted to the economy, a response to criticism that he spent too much of last year on health reform at the expense of the recession.

He ended on an upbeat note. "We have finished a difficult year. We have come through a difficult decade. But a new year has come. A new decade stretches before us. We don't quit.I don't quit."

He acknowledged he had been to blame for some of the setbacks, principally in failing to explain health reform, one of the main issues cited by those voting against the Democrats in Massachusetts last week.

He appealed for calm among Democrats panicked by the Massachusetts result.

"To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve some problems, not run for the hills," Obama said.

The health bill could still be passed, by Democrats alone, without Republican support. The House speaker, Nancy Pelosi, reversed her position yesterday to suggest the House might after all vote on a revised Senate version of the bill, a move that would avoid any Republican filibustering.

The president vowed not to desert those who had no healthcare. "I will not walk away from these Americans. And neither should the people in this chamber."

He called for a more bipartisanship approach to politics in Washington, but there was little sign of such willingness on the part of the Republicans, who spent most of the speech in their seats. The president, in spite of his plea to them, was geared up for a fight, relishing their discomfort when the Republicans appeared unsure whether to stay in their seats or applaud when he spoke about recouping money from banks, a populist issue.

The House Republican leader, John Boehner, one of those who remained conspicuously in his seat for most of the speech, offered little hope of bipartisanship.

"Unfortunately, the president and the Democrats in charge of Congress still aren't listening to the American people. The American people were looking for President Obama to change course tonight, and they got more of the same job-killing policies instead," Boehner said.

Voters in Massachusetts and, according to polls, elsewhere across the country, are upset over a recession that has left 10% unemployed, over the bank bailouts and Wall Street bonuses and ambivalent, or even outright hostile, towards his health plan.

Recalibrating his administration's agenda to meet concerns about jobs, Obama said he had saved or created 2m jobs last year and would create 1.5m this year.

This would be done mainly through investment in infrastructure, such as bridges, railways and water projects, and giving help to those small businesses that take on more workers and pay better wages.

Many of the speech's proposals to help recession-hit families had been leaked in advance, such as increased tax credits for poorer families and aid for students. In an attempt to placate voters concerned about the billions of dollars in extra federal spending, Obama is planning a partial freeze on expenditure, a largely cosmetic exercise, given that the biggest areas of federal spending, such as social programmes, are excluded.

He held out the prospect of help for students, saying that when they graduate they would only be required to pay 10% of their income on student loans and that all their debt would be forgiven after 20 years, or 10 years if they chose a career in public service.

He devoted more of his speech to climate change than had been predicted, renewing his promise to create clean energy jobs, but held out little hope that Congress would pass a climate change bill this year.

Some environmental groups such as Greenpeace welcomed his commitment to create clean energy jobs as a priority for this year.

As a concession to liberals who might feel betrayed by what they see as a shift closer to the centre ground, Obama promised that he would ask Congress to repeal "Don't Ask, Don't Tell", the compromise used by the military towards gay people, so they could serve openly. The gay community has expressed disappointment with Obama so far.

He repeated his promise to deal with the broken immigration system, but offered no timetable, though last year he hinted it would be this one.

Unusually for a state of the union speech, there was little on foreign policy, only nine minutes. He spoke about the fight against al-Qaida, tackling the nuclear programmes of North Korea and Iran. There was no mention of his failed attempt to restart Middle East peace negotiations.

In his first state of the union address the US president responded to public anger by promising action on jobs, after what he acknowledged had been a difficult year. What was the reaction to the speech?